Love that home’s view? See how much more you’ll pay
A house with a fabulous view can be hard for a homebuyer to resist. But seeing the mountains, water or city lights from the comfort of home comes at a price. The hazy part is figuring out what that added cost is — and whether it’s worth it .
That’s where real estate appraisers and analysts who study home values can help, even though they recognize there’s no simple answer.
“Views are actually really difficult to quantify,” says Andy Krause, principal data scientist at Greenfield Advisors, a real estate research company. “It’s somewhat subjective. What makes a better water view? Do you want it to be wider? Do you want more of the water from a taller angle? You know, some of that is in the eye of the beholder.”
Assigning a dollar value can also be difficult because not all views are equal or valuable, and a view that’s sought-after in one location may not be in another.
In Manhattan, a place that overlooks a green space will cost you a lot extra. In the countryside? Not as much, says Mauricio Rodriguez, a real estate expert who chairs the finance department at Texas Christian University’s Neeley School of Business.
Putting a price on it
So how do you put a price on a variety of views? Krause, who builds automated valuation models that analyze home data, produced these estimates for what five different types of views might add to a home’s price in Seattle:
• 5 PERCENT TO 10 PERCENT: For a home on flat ground with an unobstructed view of an open space or a park, a seller could add 5 percent to 10 percent. In other words, if an identical home without a view is worth $500,000 elsewhere in Seattle, this view could boost the price to $525,000 or $550,000.
• 10 PERCENT TO 30 PERCENT: A home partway up a hill with a partially obstructed water view over neighbors’ rooftops could increase the overall price by 10 percent to 30 percent. It depends on how much of your field of vision the view fills, both vertically and horizontally, Krause says. In this example, a home otherwise worth $500,000 might fetch $550,000 to $650,000.
• 30 PERCENT TO 50 PERCENT: This time Krause considered the same home as above, in the same location, but with an unobstructed view. “You still have the neighbors above looking down into your house, but you have a nice water view,” he says. With this clearer view, the $500,000 home could sell for $650,000 to $750,000.
• 50 PERCENT TO 75 PERCENT: Next, envision a home atop a hill with an unobstructed cityscape or open-space vista. To buy the $500,000 home in this location, a buyer might have to pay $725,000 to $875,000.
• 75 PERCENT TO 100 PERCENT OR MORE: Finally, imagine a house with a stunning, unobstructed view of a big lake or the ocean. This type of prized view can boost the value of a home worth $500,000 in an ordinary location to $1 million or more, Krause says.